I had some technical issues with Substack yesterday, so I wasn’t able to get this out slightly later than usual - so you’ll have to deal with a two-day’s-late post.

Starbucks is one of the companies I’m betting on to bring a new generation to web3.

Why? Well, coffee is too tempting to pass up.

Starbucks’ recent announcement to implement NFTs, could become one of the largest attempts by a retailer to integrate NFTs into their brand’s strategy. I’m excited FOR them.

In this piece, we’ll talk about:

• Starbucks’ NFT plan

• The opportunities they could explore & what could happen

Let’s get to it!

☕️ The Starbucks NFT Strategy:

When people order a coffee, they expect their experience to end with the cup. Starbucks wants to go beyond the cup - and into the interwebs (web3, specifically). They’re betting on NFTs to take them to the next level.

What’s been situation with brands and NFTs so far?

Brands are finding it increasingly difficult to cut through the noise - there’s demand from consumers for brands to represent more than just the product they are providing.

People want their brands to go beyond just offering a great product - they want to associate with a brand that stands for something - if that’s innovative technology, social justice, sustainability or something else.

Starbucks sees NFTs as a potential option to establish the digital brand with physical space - they want to be the space in-between work and home.

How do they plan to use NFTs?

They’re going to bring their ‘Pay-To-Earn’ Loyalty program to NFTs.

Starbucks currently have:

• 25+ million users

• 50+% spend in all Starbucks stores

• An increasing number of loyalty programs around the world

This makes the prospect of an NFT integration pretty interesting to a company tha grosses $29bn annually.

The announcement of this type of loyalty program has been in conversation since May 2022, but the company has decided to hold off on the finer details till an investor call in September - smart move. Don’t commit and let everyone make the mistakes first.

The opportunities ahead:

I can imagine a bunch of exciting avenues opening up - if an NFT is a symbol of exclusivity, utility and ownership (basically flaunting your wealth/status), then Starbucks are in a prime position to take advantage of this.

From an exclusivity standpoint, Starbucks has already announced their intention to create one-of-a-kind experiences that will only be available to certain NFT holders.

They could do pop-up events or secret events that only unique NFT holders can access - this solidifies their position as an ‘ubiquitous brand’ if they become the company at the forefront of using NFTs with an actual benefit - who doesn’t want more of a reason to drink more coffee?!

There could be even smarter ways (or, at least outside the current purview) to leverage NFTs - they could partner with media sites (e.g. every NFT holder gets access to a certain publication or ad-free listening experience on Spotify, or a discount at a retailer they work with) or health stores. The point is, to unlock partnerships in a way that we couldn’t before (your NFT gives you points / access to another NFT with more utility).

What’s next:

I can see Starbucks making a huge play in the NFT / web3 space.

They have the stores, the customers, the infrastructure (around their current loyalty programs) and the talent to turn this into a huge revenue stream and add to an already-rich history of innovation.

Time will tell whether they’ll break out from the other companies exploring this space and be the brand, or if this will be an experiment that failed spectacularly.

📚 Interesting Articles of the Week

💻 Programmable Incentives

Excellent piece by Invisible College on tokens as an incentive mechanism.

This country has the highest number of people wanting to quit their jobs

It’s India - where 60% of people are considering quitting - the reasons would be everything you’d expect.

Until next time

I hope you enjoyed this week’s edition - I'd love it if you shared it with a friend or two.

Got feedback? Reply to this email or tweet at me and let’s chat.

Fahim